Five years ago, a group of banking professionals got together to open up a local bank in northwest Philadelphia, figuring they had indentified a market that was not being met by the larger banks in the area.

The group, including well-known names in the Northwest, like Trolley Car Diner owner Ken Goldstein, Elfant Wissahickon owner Bob Elfant and McCoubrey Overholser president John McCoubrey to name just a few, felt it was time again to have a local bank. The last really local bank in the neighborhood had been Chestnut Hill National Bank, but National Penn bank acquired it in 1993.

There was plenty of business out there, but no banks wanted to touch it, particularly in areas of Philadelphia that the bigger banks just couldn’t understand.

“We sort of felt there was a niche that we could satisfy,” said Jay Goldstein, CEO, president and director of the Valley Green Bank. “We expected people in Chestnut Hill and Mt Airy would identify with something that is local and want to identify themselves with that. That’s worked out.”

The way Goldstein puts it, Valley Green knew how to make good loans in places larger banks would just not venture, particularly in commercial lending, small business loans — the bread and butter, if you will, of Valley Green’s business. Valley Green was a big part of the package that helped Weavers Way Co-op open in Chestnut Hill this year.

“There’s probably not a piece of real estate that we don’t know,” Goldstein said. “We get the market and we understand it. Three years ago you couldn’t find a bank willing to lend to someone who was going to buy a building on North 15th Street near Temple University and convert it to student housing. So we got the reputation to be willing to do it.

Last month, the Inquirer reported that the area around Temple is one of the best real estate investments in the city.

That scale has really worked out, according to Goldstein, who said that the bank’s portfolio of loans and deposits has far surpassed the expectations Valley Greens founders and management had in mind when they started.

Goldstein points to the banks steady march up the deposit ladder to vie for 1st place among all the banks in the Northwest when the combined markets of Mt. Airy and Chestnut Hill are taken into consideration. Since 2008, the bank has gone from holding 8 percent of the market’s deposits to 20 percent.

According to Goldstein, if the survey of bank deposits were taken this month – the last reported were in July – Valley green would be number one. The Bank began with 11 employees and now has 33 staff members with a deposit base of $148 million, $129 million in loans and $162 million in assets.

“We’re just really thrilled to have gone from nowhere to lead bank in market in five years,” he said.

So why the success? Goldstein believes that people in the Northwest have taken to the bank’s local identity. Every customer feels like an important part of a local bank.

“It’s a reflection on the community here understanding what the value is of a locally owned bank in their own community,” he said. “I think people buy into two things: (1) It’s always easier to bank in a place where they feel like an important customer. (2) When we give back to the community, we give back in their community. We’ve made a concerted effort to be a good corporate citizen in NW Philadelphia.”

But other factors have helped, too. Particularly the Great Recession that has socked many of the biggest banks in the last two years. Valley Green, Goldstein said, has maintained a healthy loan portfolio and has not suffered nearly as much.

“The benefit of the financial crisis is a lot of the bigger banks have not been in the position to provide loans to our customer base,” Goldstein said. “A few years ago, we might have been competing with five banks for a loan. Today it’s maybe one other bank competing for a loan of that quality. From a competitive standpoint it’s been helpful to us.”

Another big boost to the bank’s bottom line came earlier this year when it brought in a management team that had been working for National Penn. Valley Green’s Chairman, Al Thorell Jr., was founder and president of the Chestnut Hill National Bank and an executive vice president of National Penn.

They’ve done exactly what we were hoping they would do,” Goldstein said, “Bring their relationships over to Valley Green. This year to date we have grown by 60 percent. Started year with just over 100 million in total assets and right now we’re over 160 million in total assets, we were making 20 to 25 million a year in growth before. This year we could triple that, we’ve really solidified our place within our market, particularly on the lending side.”

So what’s next? Goldstein said the bank was not planning to expand the way the founders originally planned, with five or six branches around the region. New technologies, including check deposit scanners, allow the bank to serve more customers over a broader geographic region. Now, Valley Green Bank has customers across the Delaware Valley.

“If we have a customer in Chester County, there’s no reason we have to build a branch around the corner,” Goldstein said. “We’re just as likely to loan to a business down the street as we are to a business in Chester County.”

But it is ultimately about keeping the bank a “small town” bank even as it grows. It’s the kind of bank where only one member of management in five years has left and that was because she got a job as a Villanova professor. It’s the kind of bank where depositors know their branch employees and where the employee can wear costumes on Halloween. It’s the kind of bank that helps open a Mt. Airy Farmers Market and sposners Friends of the Wissahickon events.

“We expected people in Chestnut Hill and Mt Airy would identify with something that is local and want to identify themselves with that,” said Goldstein. “That’s worked out.”

And it has worked out – for the bank and the community.

Next Week

Valley Green Bank will be marking its fifth anniversary with a series of events during the week of Nov. 15. The lobbies will be decorated and serve cookies daily. Also both branches will have daily drawings for $50 VISA gift cards. Customers and visitors to the branches will have an opportunity to try their luck at “fishing” for $5 bills.

On November 17, the actual anniversary date, cake from local bakeries will be served throughout the day. And, in keeping with Valley Green Bank’s commitment to the community, a donation will be made to Chestnut Hill’s Meals on Wheels for their Thanksgiving dinners.